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Securities and Exchange Board of India

CIRCULAR

CIR/MRD/DP/ 39 /2010 December 28, 2010

To,

All Stock Exchanges,

Dear Sir/Madam,

Subject: Activity schedule for Auction Session

As per extant practice, in case of default by the selling broker in a settlement, the
security delivered short is bought in the auction session and is delivered to the
buying broker on T+4 day.

In order to reduce the time involved in delivering the shares to the buying broker,
in case of default, it has been decided to conduct the auction on the same day of
the settlement, after the pay-in is completed. i.e. the auction for trades done on T
day shall be conducted on T+2 day after pay-in is completed and shortfall is
crystallized.

The activity schedule as under shall be applicable with effect from February 1,
2011:

Rolling settlement for T day trade

S. No. Day Description of activity

1 T Trade Day
2 T+2 Pay-in/Pay-out of securities and funds

Auction settlement for T day trade

3 T+2 Auction session
4 T+3 Pay-in/pay-out and close-out of auction

However, as the bank and stock exchange holidays are not common there are
days when multiple settlements are conducted on the working day immediately
following the day(s) of the closure. On such days when multiple settlements (say
S1 and S2) are conducted on the same day (say Tm) the auction session shall be
as under:

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 ¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã
Securities and Exchange Board of India

1. The auction of first settlement (S1) shall be conducted on the same day (Tm)
and settled the next day (Tm+1).
2. The auction for the second settlement (S2) shall be conducted on the next day
(Tm+1) along with the shortages/auction of that day. The settlement of the
same shall happen on the subsequent day (Tm+2).

The Stock Exchanges are advised to:

i. put in place the adequate systems and issue the necessary guidelines for
implementing the above decision.
ii. make necessary amendments to the relevant bye-laws, rules and
regulations for the implementation of the above
iii. bring the provisions of this circular to the notice of the stock brokers and
also disseminate the same on their website.

This circular is being issued in exercise of powers conferred under Section 11(1)
of Securities and Exchange Board of India Act, 1992 to protect the interests of
investors in securities and to promote the development of, and to regulate, the
securities market.

Harini Balaji
Deputy General Manager
022-26449372
harinib@sebi.gov.in

CC: To all Depositories

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